UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
February 23, 2017
Date of Report (Date of earliest event reported)
PRGX Global, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Georgia
(State or Other Jurisdiction of Incorporation)
0-28000 | 58-2213805 | |
(Commission File Number) | (IRS Employer Identification No.) | |
600 Galleria Parkway, Suite 100, Atlanta, Georgia | 30339-5949 | |
(Address of Principal Executive Offices) | (Zip Code) |
770-779-3900
(Registrants Telephone Number, Including Area Code)
Not Applicable
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
☐ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
☐ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
☐ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
☐ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 1.01 | Entry into a Material Definitive Agreement |
On October 6, 2016, PRGX Global, Inc., through its wholly owned subsidiaries PRGX USA, INC. and PRGX UK LTD. (collectively PRGX or the Company) entered into an Asset Purchase Agreement (the Initial Purchase Agreement) with Cost & Compliance Associates, LLC, Cost & Compliance Associates Limited (collectively, C&CA or the Sellers) and Robert F. Donohue. On February 23, 2017, the parties entered into an amendment (the Amendment, and together with the Initial Purchase Agreement, the Purchase Agreement), pursuant to which the parties amended the Initial Purchase Agreement to, among other things, adjust the amount PRGX will pay at closing from a variable amount of up to $11 million to a fixed amount of $10 million and to modify the terms of the earnout to include certain earnout credit tied to the revenue from PRGXs contract compliance business during the two years after closing.
Item 2.01 | Completion of Acquisition or Disposition of Assets |
On February 23, 2017, PRGX acquired substantially all of the assets of the Sellers (the Acquisition) pursuant to the terms of the Purchase Agreement. C&CA is engaged in the business of marketing and providing accounts payable recovery audit services, contract compliance audit services and related advisory and data analytics services to commercial enterprises.
At the closing of the transactions contemplated by the Purchase Agreement, PRGX paid to C&CA $10.0 million in cash (the Closing Consideration). The Closing Consideration is subject to a customary working capital adjustment. In addition, PRGX may be required to pay earnout consideration in cash over a period of two years, based on the performance of the acquired businesses and PRGXs contract compliance business following closing. The aggregate consideration to be paid to the Sellers under the terms of the Purchase Agreement (including the Closing Consideration) cannot exceed $18.0 million.
The foregoing description of the Purchase Agreement and the transactions contemplated thereby does not purport to be complete and is qualified in its entirety by reference to the Initial Purchase Agreement and the Amendment, copies of which are attached as Exhibit 2.1 and Exhibit 2.2 to this Current Report on Form 8-K, respectively. PRGX issued a press release on February 23, 2017 regarding the closing of the transactions contemplated by the Purchase Agreement, a copy of which is attached as Exhibit 99.1 to this Current Report on Form 8-K.
Item 9.01 | Financial Statements and Exhibits |
(a) | Financial Statements of Businesses Acquired. |
The financial statements required by this item with respect to the Acquisition will be filed as soon as practicable, and in any event not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed pursuant to Item 2.01.
(b) | Pro Forma Financial Information. |
The pro forma financial information required by this item with respect to the Acquisition will be filed as soon as practicable, and in any event not later than 71 days after the date on which this Current Report on Form 8-K is required to be filed pursuant to Item 2.01.
(d) | Exhibits |
The following exhibits are filed herewith:
Exhibit No. |
Description | |
2.1* | Asset Purchase Agreement, dated October 6, 2016 by and among PRGX USA, INC., PRGX UK LTD., Cost & Compliance Associates, LLC, Cost & Compliance Associates Limited and Robert F. Donohue (1) | |
2.2* | First Amendment to Asset Purchase Agreement, dated February 23, 2017 by and among PRGX USA, INC., PRGX UK LTD., Cost & Compliance Associates, LLC, Cost & Compliance Associates Limited and Robert F. Donohue (2) | |
99.1 | Press Release dated February 23, 2017 (2) |
* | Pursuant to Item 601(b)(2) of Regulation S-K, the schedules and exhibits to the agreement have not been filed herewith. The registrant agrees to furnish supplementally a copy of any omitted schedule or exhibit to the Securities and Exchange Commission upon request. |
(1) | Previously filed as Exhibit 2.1 to the registrants Current Report on Form 8-K filed with the Securities and Exchange Commission on October 6, 2016. |
(2) | Filed herewith. |
SIGNATURES
Pursuant to the requirements of Section 12 of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
PRGX Global, Inc. | ||
By: | /s/ Victor A. Allums | |
Victor A. Allums | ||
Senior Vice President, Secretary and General Counsel |
Dated: February 27, 2017
Exhibit 2.2
First Amendment to
Asset Purchase Agreement
FIRST AMENDMENT TO
ASSET PURCHASE AGREEMENT
THIS FIRST AMENDMENT (this Amendment) TO ASSET PURCHASE AGREEMENT is made and entered into to be effective as of this 23rd day of February, 2017, by and among PRGX USA, INC., a Georgia corporation (the US Purchaser), PRGX UK LTD., a private limited company incorporated in England and Wales (the UK Purchaser, and together with the US Purchaser, the Purchasers), COST & COMPLIANCE ASSOCIATES, LLC, a Georgia limited liability company (the US Company), COST & COMPLIANCE ASSOCIATES LIMITED, a private limited company incorporated in England and Wales (the UK Company, and together with the US Company, the Companies), and ROBERT F. DONOHUE, an individual resident of the State of Georgia (the Member). The Purchasers, the Companies and the Member are sometimes individually referred to herein as a Party and collectively as the Parties. Capitalized terms used but not otherwise defined herein shall have the respective meanings ascribed thereto in the Purchase Agreement (as defined below).
WHEREAS, the Parties are parties to that certain Asset Purchase Agreement dated as of October 6, 2016 (the Purchase Agreement); and
WHEREAS, the Parties wish to amend and modify the Purchase Agreement in certain respects;
NOW, THEREFORE, for and in consideration of the premises and the mutual covenants and agreements set forth herein, and for other consideration, the receipt, adequacy and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as described below and amend the Purchase Agreement as follows:
1. Assumed Contracts. Each of Schedule 1.2(c)(i) and Schedule 1.2(c)(iv) to the Purchase Agreement is hereby amended and restated in its entirety as set forth on Schedule 1.2(c)(i) and Schedule 1.2(c)(iv), respectively, as attached to this Amendment.
2. Excluded Assets. The definition of Excluded Assets is hereby supplemented to include those assets, properties and rights listed on Schedule 1.3 as attached to this Amendment.
3. Purchase Price. Section 2.1 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:
The aggregate amount to be paid for the Assets (the Purchase Price) shall be (a) TEN MILLION DOLLARS ($10,000,000) (the Closing Cash Amount), subject to adjustment pursuant to Section 2.3, plus (b) up to EIGHT MILLION DOLLARS ($8,000,000) as Earnout Payments (as defined herein) pursuant to the terms and conditions of Section 2.4. In addition to the foregoing, as consideration for the sale, grant, assignment, transfer and delivery of the Assets, the Purchasers shall assume and discharge the Assumed Liabilities.
First Amendment to
Asset Purchase Agreement
4. Payment of Purchase Price. Section 2.2 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:
(a) On the Closing Date (which shall be the date hereof), the Purchasers shall pay or cause to be paid to the Companies an amount equal to the Closing Cash Amount. Such payment shall be made in cash by the wire transfer of immediately available funds to such bank account(s) as shall have been designated in writing by the Companies at least three (3) Business Days prior to the Closing Date.
(b) Subject to any adjustment pursuant to Section 2.3 and any Earnout Payments pursuant to Section 2.4, the Companies and the Member acknowledge that the payment made pursuant to Section 2.2(a) constitutes payment in full of the Purchase Price.
5. Earnout Payments. Section 2.4 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:
(a) For purposes of this Section 2.4, the following definitions shall apply:
(i) Adjacent Services shall mean services provided by Purchaser Parent or its subsidiaries other than RA Services and CC Services. Such services shall include, without limitation, supplier information management services, spend analytics services and cost harmonization services.
(ii) Applicable Period shall mean, as applicable, the First Period or the Second Period. The First Period and the Second Period shall be referred to collectively as the Earnout Period.
(iii) Base Earnout EBITDA shall mean, for an Applicable Period, the Base Earnout Revenue for such Applicable Period less operating and other expenses associated with such Base Earnout Revenue (other than interest expense, income tax expense, depreciation expense and amortization expense), all as determined in accordance with the parameters of Schedule 2.4(a)(iii).
(iv) Base Earnout Revenue shall mean, for an Applicable Period, the sum of, without duplication,
(A) 100% of the revenue for such Applicable Period in respect of RA Services, CC Services or Adjacent Services to Non-Overlapping Company Clients,
(B) 100% of the revenue for such Applicable Period in respect of RA Services or CC Services to Overlapping Company Clients to the extent that such services are (1) provided to the business unit, branch or division of such client serviced by the Companies prior to the Closing Date, and (2) within the scope of services provided to such client by the Companies prior to the Closing Date (in each case, as described on Schedule 2.4(a)(xii));
2
First Amendment to
Asset Purchase Agreement
(C) 100% of the revenue for such Applicable Period in respect of Adjacent Services to Overlapping Company Clients in the event that the engagement for such services is secured primarily as a result of the introduction and sales efforts of the Transferred Employees;
(D) 100% of the revenue for such Applicable Period in respect of RA Services, CC Services or Adjacent Services to Non-Overlapping Company Prospects; and
(E) the applicable Sharing Percentage of the revenue for such Applicable Period in respect of RA Services, CC Services or Adjacent Services to Overlapping Company Prospects.
Notwithstanding the foregoing, if (1) the applicable rate charged by the Purchaser Parent or its subsidiaries on the Closing Date to an Overlapping Company Client for a service is less than the applicable rate charged by the Companies on the Closing Date to such Overlapping Company Client for the same service and (2) the Purchaser Parent or its subsidiaries agrees to provide such service following the Closing Date to the business unit, branch or division of such Overlapping Company Client serviced by the Companies prior to the Closing Date at the lower rate charged by the Purchaser Parent or its subsidiaries on the Closing Date, then Base Earnout Revenue under clause (B) above with respect to such Overlapping Company Client shall be adjusted to reflect the amount that would have been determined thereunder if the applicable rate charged by the Companies on the Closing Date for such service had not been reduced.
(v) Base EBITDA Margin shall mean, for an Applicable Period, a percentage obtained by dividing (A) the Base Earnout EBITDA for such Applicable Period, by (B) the Base Earnout Revenue for such Applicable Period.
(vi) CC Services shall mean contract compliance services provided by Purchaser Parent or its subsidiaries.
(vii) First Period shall mean the period commencing on March 1, 2017 and ending on February 28, 2018.
(viii) First Period Base Earnout Revenue shall mean Base Earnout Revenue for the First Period.
(ix) First Period Supplemental Earnout Revenue shall mean Supplemental Earnout Revenue for the First Period.
(x) Non-Overlapping Company Clients shall mean those clients of the Business specifically listed on Schedule 2.4(a)(x).
(xi) Non-Overlapping Company Prospects shall mean those prospects of the Business specifically listed on Schedule 2.4(a)(xi).
3
First Amendment to
Asset Purchase Agreement
(xii) Overlapping Company Clients shall mean those clients of the Business specifically listed on Schedule 2.4(a)(xii).
(xiii) Overlapping Company Prospects shall mean those prospects of the Business specifically listed on Schedule 2.4(a)(xiii).
(xiv) Purchaser Clients shall mean those clients of Purchaser Parent or its subsidiaries other than Non-Overlapping Company Clients, Non-Overlapping Company Prospects, Overlapping Company Clients and Overlapping Company Prospects.
(xv) Purchaser Parent shall mean PRGX Global, Inc., a Georgia corporation.
(xvi) RA Services shall mean recovery audit services provided by Purchaser Parent or its subsidiaries.
(xvii) Second Period shall mean the period commencing on March 1, 2017 and ending on February 28, 2019; provided, however, with respect to Supplemental Earnout Revenue, Second Period shall mean the period commencing on March 1, 2018 and ending on February 28, 2019.
(xviii) Second Period Base Earnout Revenue shall mean Base Earnout Revenue for the Second Period.
(xix) Second Period Supplemental Earnout Revenue shall mean Supplemental Earnout Revenue for the Second Period.
(xx) Sharing Percentage shall mean, for each Overlapping Company Prospect, the percentage set forth opposite such prospect on Schedule 2.4(a)(xiii). If no such percentage for an Overlapping Company Prospect is designated, then the Sharing Percentage for such prospect shall be 50%.
(xxi) Supplemental Earnout Revenue shall mean, for an Applicable Period, the sum of, without duplication, (a) 100% of the revenue for such Applicable Period in respect of CC Services to Purchaser Clients and (b) 100% of the revenue for such Applicable Period in respect of CC Services to Overlapping Company Clients to the extent such revenue is not includable as Base Earnout Revenue under clause (B) of the definition of Base Earnout Revenue. Notwithstanding the foregoing, (1) if the Members employment with Purchaser Parent or any of its subsidiaries terminates during such Applicable Period (other than as a result of a termination by Purchaser Parent or any of its subsidiaries for Cause), then Supplemental Earnout Revenue for such Applicable Period shall be deemed to include only such revenue through the month ended immediately prior to the effective termination date and (2) if the Members employment with Purchaser Parent or any of its subsidiaries terminates during such Applicable Period as a result of a termination by Purchaser Parent or any of its subsidiaries for Cause, then Supplemental Earnout Revenue for such Applicable Period shall be zero. As used
4
First Amendment to
Asset Purchase Agreement
herein, the terms Cause shall have the meaning ascribed to such term in the employment offer letter entered into by and between the US Purchaser and the Member in connection with the transactions contemplated by this Agreement.
(b) Subject to the terms and conditions of this Section 2.4 (including clause (i) below), following the First Period, if the First Period Base Earnout Revenue is greater than $11,000,000 but not greater than $12,000,000, then the Purchasers shall pay the Companies an amount equal to 100% of the amount by which the First Period Base Earnout Revenue exceeds $11,000,000.
(c) Subject to the terms and conditions of this Section 2.4 (including clauses (i) and (j) below), following the First Period, if the First Period Base Earnout Revenue is greater than $12,000,000, then the Purchasers shall pay the Companies an amount equal to the sum of (i) $1,000,000 and (ii) 150% of the amount by which the First Period Base Earnout Revenue exceeds $12,000,000. The amount, if any, payable pursuant to Section 2.4(b) or Section 2.4(c), as applicable, is referred to herein as the First Period Base Earnout Payment.
(d) Subject to the terms and conditions of this Section 2.4 (including clause (j) below), following the First Period, then the Purchasers shall pay the Companies an amount (such amount, if payable pursuant to this Section 2.4(d), the First Period Supplemental Earnout Payment) equal to the sum of, without duplication, (i) 25% of the First Period Supplemental Earnout Revenue provided pursuant to a contract, statement of work, work order or other written approval authorizing an audit for a specific supplier, in any such case, in effect as of the Closing Date (each, a 25% Audit) and (ii) 50% of the First Period Supplemental Earnout Revenue provided pursuant to a contract, statement of work, work order or other written approval authorizing an audit for a specific supplier, in any such case, entered into after the Closing Date (it being understood that this clause (ii) shall apply notwithstanding any such specific statement of work, work order or other written approval being issued pursuant to a contract or non-specific statement of work in effect as of the Closing Date) (each, a 50% Audit).
(e) Subject to the terms and conditions of this Section 2.4 (including clause (i) below), following the Second Period, if the Second Period Base Earnout Revenue is greater than $23,000,000 but not greater than $28,000,000, then the Purchasers shall pay the Companies an amount equal to 40% of the amount by which the Second Period Base Earnout Revenue exceeds $23,000,000.
(f) Subject to the terms and conditions of this Section 2.4 (including clauses (i) and (j) below), following the Second Period, if the Second Period Base Earnout Revenue is greater than $28,000,000, then the Purchasers shall pay the Companies an amount equal to the sum of (i) $2,000,000 and (ii) 25% of the amount by which the Second Period Base Earnout Revenue exceeds $28,000,000. The amount, if any, payable pursuant to Section 2.4(e) or Section 2.4(f), as applicable, is referred to herein as the Second Period Base Earnout Payment.
(g) Subject to the terms and conditions of this Section 2.4 (including clause (j) below), following the Second Period, then the Purchasers shall pay the Companies an amount (such amount, if payable pursuant to this Section 2.4(g), the Second Period Supplemental
5
First Amendment to
Asset Purchase Agreement
Earnout Payment) equal to (i) the sum of, without duplication, (A) 25% of the Second Period Supplemental Earnout Revenue provided pursuant to a 25% Audit and (B) 50% of the Second Period Supplemental Earnout Revenue provided pursuant to a 50% Audit, plus (ii) the portion, if any, of the First Period Supplemental Earnout Payment that was not paid by the Purchasers by reason of the applicability of clause (i) of Section 2.4(j) (it being understood that, for such purposes, the First Period Base Earnout Payment shall be deemed to be applied first against the $4,000,000 amount set forth in clause (i) of Section 2.4(j)).
(h) The First Period Base Earnout Payment, the First Period Supplemental Earnout Payment, the Second Period Base Earnout Payment and the Second Period Supplemental Earnout Payment are each hereinafter referred to, individually, as an Earnout Payment and, collectively, as the Earnout Payments.
(i) Notwithstanding anything contained herein to the contrary, if the Base EBITDA Margin for an Applicable Period is less than 20%, then the First Period Base Earnout Payment or the Second Period Base Earnout Payment (as applicable with respect to such Applicable Period) shall be reduced by an amount equal to the difference resulting from the following calculation: (1) 20% of the Base Earnout Revenue for such Applicable Period, minus (2) the Base Earnout EBITDA for such Applicable Period.
(j) Notwithstanding anything contained herein to the contrary, (i) the maximum amount required to be paid by the Purchasers in respect of the First Period Base Earnout Payment and the First Period Supplemental Earnout Payment shall not exceed, in the aggregate, $4,000,000 and (ii) the maximum amount required to be paid by the Purchasers in respect of all of the Earnout Payments shall not exceed, in the aggregate, $8,000,000.
(k) By no later than ninety (90) days after the end of each Applicable Period, the Purchasers will prepare and deliver to the Companies a detailed calculation of the Earnout Payment(s), if any, for such Applicable Period (each, a Preliminary Earnout Calculation Schedule). The Purchasers shall permit the Companies and the Member and their representatives to have reasonable access to the books, records and other documents (including work papers) pertaining to or used in connection with the preparation of such Preliminary Earnout Calculation Schedule.
(l) The Companies shall have thirty (30) days following receipt of a Preliminary Earnout Calculation Schedule during which to notify the Purchasers of any dispute of any item contained in such Preliminary Earnout Calculation Schedule, which notice shall set forth in reasonable detail the basis for such dispute. If the Companies do not notify the Purchasers of any dispute within such thirty (30) day period, such Preliminary Earnout Calculation Schedule shall be deemed to be the Final Earnout Calculation Schedule for such Applicable Period. The Purchasers and the Companies shall cooperate in good faith to resolve any dispute as promptly as possible, and upon such resolution, the Final Earnout Calculation Schedule shall be prepared in accordance with the agreement of the Purchasers and the Companies.
6
First Amendment to
Asset Purchase Agreement
(m) If the Purchasers and the Companies are unable to resolve any dispute regarding a Preliminary Earnout Calculation Schedule within twenty (20) days (or such longer period as the Purchasers and the Companies shall agree in writing) of notice of a dispute, the Parties shall engage the Arbitrator to resolve all issues having a bearing on such dispute and such resolution shall be final and binding on the Parties. The Parties shall cooperate in good faith to assist the Arbitrator in connection with its work and to provide any information reasonably requested by the Arbitrator in connection therewith as promptly as possible. The Arbitrator shall use commercially reasonable efforts to complete its work within thirty (30) days of its engagement. The expenses of the Arbitrator shall be shared equally by the Companies and the Member, on the one hand, and the Purchasers, on the other hand. The calculation of an Earnout Payment as finally determined pursuant to this Section 2.4 is referred to herein as the Final Earnout Calculation Schedule.
(n) Within five (5) Business Days after the determination of a Final Earnout Calculation Schedule in accordance with this Section 2.4, the Purchasers shall pay to the Companies an amount equal to the applicable Earnout Payment(s), if any, set forth on such Final Earnout Calculation Schedule. Any payment required under this Section 2.4(n) shall be made in cash by the wire transfer of immediately available funds to such bank account(s) as shall be designated in writing by the recipient at least three (3) Business Days prior to the applicable payment date.
(o) The Member and the Companies hereby acknowledge that the achievement of applicable revenue results sufficient to result in any Earnout Payments is uncertain and that the Business and/or the business of Purchaser Parent and its subsidiaries may not achieve such level, and it is therefore not assured that the Companies will be entitled to any Earnout Payments. The Member and the Companies further acknowledge that the Purchasers and/or their Affiliates shall have the right to operate the Business and their respective businesses in a manner that they deem to be in the best interests of the Purchasers and/or their Affiliates and their respective shareholders, and the Member or the Companies will have no right to dispute the determination of any results hereunder based on any claim or allegation that arises out of or relates to the exercise of business judgment by the Purchasers and/or their Affiliates; provided, however, that the Purchasers shall not take or omit to take any action with the intent to reduce, eliminate or avoid the Earnout Payments under this Agreement. The Purchasers shall maintain separate accounting books and records for the Business and CC Services during the Earnout Period. The obligation of Purchasers to make the First Period Base Earnout Payment or the Second Period Base Earnout Payment shall not be conditioned on the continued employment of the Member or any other party.
(p) For purposes of this Section 2.4, revenue and expenses shall be determined in accordance with GAAP in effect on the Closing Date and, to the extent not in conflict with GAAP in effect as of the Closing Date, consistent with the accounting policies used in the preparation of Purchaser Parents financial statements included in the forms, reports, statements and documents filed by Purchaser Parent with the Securities and Exchange Commission since January 1, 2016. Notwithstanding the foregoing, with respect to any Client Contract that is a Non-Assigned Contract, revenue shall be determined on a cash basis during any period prior to the date on which such Client Contract has been assigned to the Purchasers pursuant to the terms and conditions of this Agreement.
7
First Amendment to
Asset Purchase Agreement
(q) The Parties agree to cooperate in developing a specific list of 25% Audits within 20 days following the Closing Date.
6. Updates to Certain Additional Schedules.
(a) Schedule 2.2 to the Purchase Agreement is hereby deleted in its entirety.
(b) Schedule 2.4(a)(viii) to the Purchase Agreement (as referenced in the definition of Non-Overlapping Company Clients) is hereby deleted and replaced with Schedule 2.4(a)(x) as attached to this Amendment.
(c) Schedule 2.4(a)(ix) to the Purchase Agreement (as referenced in the definition of Non-Overlapping Company Prospects) is hereby deleted and replaced with Schedule 2.4(a)(xi) as attached to this Amendment.
(d) Schedule 2.4(a)(x) to the Purchase Agreement (as referenced in the definition of Overlapping Company Clients) is hereby deleted and replaced with Schedule 2.4(a)(xii) as attached to this Amendment.
(e) Schedule 2.4(a)(xi) to the Purchase Agreement (as referenced in the definition of Non-Overlapping Company Prospects) is hereby deleted and replaced with Schedule 2.4(a)(xiii) as attached to this Amendment.
7. Reasonable Efforts; Further Assurances; Cooperation. The last sentence of Section 5.4(c) of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:
Such reporting obligation shall commence upon the execution and delivery of this Agreement and continue until the earlier to occur of (i) the date on which all applicable Client Contracts have been assigned to the Purchasers pursuant to the terms and conditions of this Agreement and (ii) January 31, 2018.
8. Name Change. The first sentence of Section 5.11 of the Purchase Agreement is hereby amended and restated in its entirety to read as follows:
Within ten (10) Business Days following the earlier to occur of (a) the date on which all applicable Client Contracts have been assigned to the Purchasers pursuant to the terms and conditions of this Agreement and (b) January 31, 2018, the Companies shall change their respective corporate names to remove any reference to the name Cost & Compliance Associates (or any similar variation or derivation thereof) or any other trade name used in the Business (including, without limitation C&CA).
9. Conflicting Terms; Limitation of Amendment. In the event of any conflict or inconsistency between the terms of this Amendment (including any Schedule hereto) and the Purchase Agreement, the terms of this Amendment shall control. Except as otherwise set forth herein, all terms and provisions of the Purchase Agreement shall remain in full force and effect.
8
First Amendment to
Asset Purchase Agreement
10. Governing Law. This Amendment will be governed by and construed and enforced in accordance with the internal laws of the State of Georgia without reference to its choice of law rules.
11. Counterparts. This Amendment may be executed in two (2) or more counterparts, each of which will be deemed an original, and it will not be necessary in making proof of this Amendment or the terms of this Amendment to produce or account for more than one (1) of such counterparts. A signed copy of this Amendment delivered by facsimile, e-mail or other means of electronic transmission shall be deemed to have the same legal effect as delivery of an original signed copy of this Amendment.
***
9
First Amendment to
Asset Purchase Agreement
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of the date first above written.
PRGX USA, INC. | ||
By: | /s/ RONALD E. STEWART | |
Name: | Ronald E. Stewart | |
Title: | President and Chief Executive Officer | |
PRGX UK LTD. | ||
By: | /s/ RONALD E. STEWART | |
Name: | Ronald E. Stewart | |
Title: | Sole Director | |
COST & COMPLIANCE ASSOCIATES, LLC | ||
By: | /s/ ROBERT F. DONOHUE | |
Name: | Robert F. Donohue | |
Title: | President | |
COST & COMPLIANCE ASSOCIATES LIMITED | ||
By: | /s/ ROBERT F. DONOHUE | |
Name: | Robert F. Donohue | |
Title: | Sole Director | |
/s/ ROBERT F. DONOHUE | ||
Robert F. Donohue |
Exhibit 99.1
PRGX Completes Acquisition of Cost & Compliance Associates
ATLANTA, February 23, 2017 PRGX Global, Inc. (Nasdaq: PRGX), a global leader in Recovery Audit and Spend Analytics services, today announced it has completed its acquisition of substantially all of the assets of Cost & Compliance Associates (C&CA), a commercial Recovery Audit and Contract Compliance firm with operations in the US and the UK.
We are pleased to announce that we have closed the C&CA acquisition. The addition of C&CA brings tremendous value to PRGX, including a rich set of global clients and a skilled and experienced team led by Bob Donohue. This acquisition further strengthens our position in commercial Recovery Audit and Contract Compliance services, said Ron Stewart, PRGX president and chief executive officer. As we integrate C&CA into our company, we will look to unlock opportunities to provide our expanded service offerings in Supplier Information Management (SIM) and Source-to-Pay (S2P) Analytics to C&CAs world class clients, concluded Stewart.
We are excited about joining PRGX, said Bob Donohue, founder of C&CA and Vice President Commercial & Contract Compliance at PRGX. We see a great cultural fit for our clients and our employees as we begin this new chapter as part of PRGX. I am very confident that our clients will find great value in our combined suite of Recovery Audit, Contract Compliance, SIM and Analytics services, concluded Donohue.
Further details regarding the terms of the transaction will be available in the Current Report on Form 8-K to be filed by PRGX with the U.S. Securities and Exchange Commission.
In connection with the closing of the C&CA acquisition, PRGX is granting options to purchase a total of 100,000 shares of its common stock to six employees joining PRGX from C&CA, including 25,000 options to Mr. Donohue. The options will have a per share exercise price equal to the closing price of PRGXs common stock on February 24, 2017. Subject to the respective employees continued employment with PRGX, the options granted to Mr. Donohue will vest ratably over three years (one-third on each anniversary of the grant date) and the remaining options will vest in full on February 24, 2020. The options also vest in full in the event of a change in control of PRGX, provided the employee has been continuously employed by PRGX until such event.
The grants were approved by the compensation committee of PRGXs board of directors, which committee is comprised solely of independent directors, and were granted as an inducement material to the employees entering into employment with PRGX in accordance with Nasdaq Listing Rule 5635(c)(4).
About PRGX
PRGX Global, Inc. is a global leader in Recovery Audit and Spend Analytics services. With over 1,400 employees, the company serves clients in more than 30 countries and provides its services to 75% of the top 20 global retailers and over 20% of the top 50 companies in the Fortune 500. PRGX delivers more than $1 billion in cash flow improvement for its clients each year. The creator of the Recovery Audit industry more than 40 years ago, PRGX continues to innovate through technology and expanded service offerings. In addition to Recovery Audit, the company provides Contract Compliance, Spend Analytics and Supplier Information Management services to improve clients financial performance and manage risk. For additional information on PRGX, please visit www.prgx.com.
Forward-Looking Statements
In addition to historical information, this press release includes certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include both implied and express statements regarding the anticipated benefits from the C&CA acquisition, the companys overall condition and growth prospects, the companys execution of its transformation strategy, the companys investments in, and opportunities associated with, its growth platforms, including its supplier information services business. Such forward-looking statements are not guarantees of future performance and are subject to risks, uncertainties and other factors that may cause the actual results, performance or achievements of the company to differ materially from the historical results or from any results expressed or implied by such forward-looking statements. Risks that could affect the companys future performance include revenue that does not meet expectations or justify costs incurred, the companys ability to develop material sources of new revenue in addition to revenue from its core Recovery Audit services, changes in the market for the companys services, the companys ability to retain and attract qualified personnel, the companys ability to integrate recent and future acquisitions, the companys ability to integrate the C&CA business, uncertainty in the credit markets, the companys ability to maintain compliance with its financial covenants, client bankruptcies, loss of major clients, and other risks generally applicable to the companys business. For a discussion of other risk factors that may impact the companys business, please see the companys filings with the Securities and Exchange Commission, including its Form 10-K filed on March 15, 2016. The company disclaims any obligation or duty to update or modify these forward-looking statements.
Contact:
Michele Mahon
(770) 779-3212
michele.mahon@prgx.com